Highlights
Hopes for a last-minute breakthrough or at least a respite in US and Israeli attacks on Iran lifted major stock indexes from the day's lows to close nearly flat Tuesday.
The Dow Jones industrial average lost 0.2 percent while the broader S&P 500 and the Nasdaq firmed 0.1 percent. US Treasury yields and oil prices reversed modest morning gains to close lower and the dollar declined.
The market reacted favorably late in the day to reports suggesting Pakistan was working to broker a ceasefire and news that Pakistan's prime minister asked President Trump to extend his deadline by two weeks. Investors generally remain skeptical that Trump would carry out his threats to end Iranian civilization or to destroy Iran's civilian infrastructure. Markets had not reacted strongly to the president's threats to act by 8 p.m. if Iran did not reopen the Strait of Hormuz but there has been considerable risk aversion.
Investors continue to focus on what will happen after 8 pm ET as everyone understands Trump is the sole decision-maker.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.